The best set up would be separate boxes for web and other services and one for MSSQL. Depending upon your situation, we have set up customers with all on one box with a migration plan to separate the db features as soon as the business can justify.
MSSQL is a great program, however it is very resource intensive! The best is to have a high power machine for your SQL and the other server can be much less robust. Connect the two servers with a cross over cable so all querries do not go via public interface.
I would set up your SQL server with Xeon processor(s) and min 1GB DDR RAM, more if you can afford it. Dual processors are nice, but they require an addl SQL license. I would recommend starting with a single processor and adding additional as the need/revenue can justify. Also, depending upon your budget, look at processors with larger cache if possible.